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Enterprise resource planning (ERP) systems are essential to federal government efforts to achieve fiscal auditability, improve service and reduce costs.
Many organizations have turned to ERPs to help modernize business processes and perform general ledger, financial management, procurement and supply chain functions, among others. Given that many efforts remain ongoing and more ERPs are certain to come, what are some key factors and practices to ensure ERP success?
With trillion-dollar federal deficits and increasing pressure to cut spending, federal organizations can strengthen performance and maximize taxpayer trust by ensuring ERPs are properly developed and implemented. Accenture works closely with federal and defense financial and information technology leaders to deliver systems that enable transformed processes, more efficient and effective operations and improved audit readiness. The benefits extend across the organization—smarter decisions more quickly, and better use of scarce funding and resources with more transparency, putting everyone on the road to high performance.
Strong governance and committed leadership go hand in hand. All successful ERP implementations share this critical approach—and nearly all unsuccessful ERP efforts do not. The informed and continuous involvement of senior leadership is essential and necessary to promote good program governance. The benefits of this approach are many:
Demonstrates the strongest possible commitment to the business case. Just think; if senior leadership can’t make time for the program, how important can the business case (and the system) truly be?
Promotes “leadership by example” in driving change management and gaining the buy-in of lower-level supervisors and employees.
Promotes and ensures a strong program management structure, enabling timely and effective action to perform the proper analysis, and make and enforce decisions.
Too often, ERPs start with a good business case and well-defined business benefits, but as system development drags into multiple years, it often takes on a life of its own. Getting a functioning system up and running becomes the end instead of being the means to achieve the initially outlined benefits and business case. Avoid this trap by ensuring your executive leadership drives the establishment and reporting of key business and operational benefit metrics in the early stages of the ERP. Managers will be more likely to adopt the ERP when they see how it benefits their area of the business. Likewise, end users and customers will be more likely to embrace the ERP when they see the system “payback” in action.
Every ERP effort encounters those who criticize the “ditching” of seemingly sound legacy processes and the time and effort it takes to adopt a system with (usually) limited initial functionality. The critics may ask, “Why are we adopting a system that can’t give us everything we need?” The truth is that “perfection” isn’t realistic in any ERP effort constrained by money and time. However, a functional and actionable system is achievable if the program is properly scoped, resourced and led. The solution is simple: Executive leadership must convey and reinforce the message of positive change early and often as part of the overall program governance and change management.
Many organizations limit an ERP’s scope in the initial business case to meet a budgeted target or limit overall costs. However, this approach invariably leaves out critical functionality that the organization needs to achieve the full promise of the system and/or significantly improve other business processes and operations. Executive leadership must understand that additional development and implementation costs are almost certain to come if the initial system scope is deliberately constrained, especially if done so as a budget/cost exercise.
Accenture recommends taking the following approach toward an ERP implementation:
Involve your functional subject matter experts (SMEs)An organization cannot rely solely on system integration technical experts and external consultants to fully implement and integrate an ERP. The early and continuous involvement of SMEs who work with the ERP-supported legacy business processes is essential to a successful mission accomplished.
COTS vs. customSuccessful ERP efforts tap the power of the proven business processes inherent in the software. ERPs offer an excellent opportunity to reform and transform organizational business processes and adopt best practices that have been proven in both the commercial and government worlds.
Be ruthless with your dataAny organization undergoing a large-scale ERP will have years and years of legacy system data—data that many will insist be incorporated within the new system. This can be a recipe for disaster if not done carefully. First, legacy data are usually prone to error, through inadvertent duplication, inaccuracy or omission. Second, any legacy data converted for ERP inclusion must be cleansed to the maximum extent possible (an expensive and time-consuming process, if done correctly). Successful ERPs have ruthlessly excluded as much legacy data as possible, and have ruthlessly cleansed what data remain. It is better to incur the cost of cleansing (or to continue your legacy system support for a period of time until the data can be closed out) than risk your entire system development.
April 12, 2012
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